Montana Asbestos Mine Settlement Little Comfort to Future Victims

A former mill stands empty in the town of Libby, where hundreds of people have died from asbestos diseases related to the former W.R. Grace plant that processed vermiculite insulation there. (David Reese photo)

KALISPELL, Mont. (CN) – There’s a small stack of photocopies on Allan McGarvey’s desk that shows this month’s dead clients. They are the obituaries of the victims that died in December of asbestos disease, a deadly cancer caused by exposure to vermiculite asbestos in the town of Libby, Montana.

And the dead will keep on coming from that pernicious disease, although a settlement announced Jan. 18 in Montana’s Cascade County District Court will help pay for some of the medical costs, pain and suffering for over 1,000 victims named in civil suits against the state of Montana and its insurance company.

The $24 million settlement was a major milestone in the asbestos litigation, and one Montana firm has been at the forefront of the asbestos-related health claims since the health crisis began unfolding in Libby nearly 30 years ago.

McGarvey is an attorney with McGarvey, Heberling, Sullivan and Lacey, the Kalispell, Montana, law firm that has filed thousands of asbestos-related lawsuits stemming from the Libby vermiculite mine, where geologic vermiculite was mined and processed into home insulation in the 1950s through 1991. The vermiculite contained deadly asbestos that infected workers, who also carried it home on their clothes.

The firm represented over 800 clients in last week’s settlement. McGarvey remembers when the cases started to trickle in, back in the late 1980s. The cases started as smaller workers’ compensation claims.

“Then we started to recognize there was something serious going on,” McGarvey said in an interview at his office.

As more sick people came forward, McGarvey said he started to see family members of the workers getting sick. That’s when his firm began filing lawsuits against W.R. Grace, the original owner of the vermiculite that is now in bankruptcy protection.

“That created such a storm of attention” that the EPA came in and began a cleanup plan for Libby, he said. “The cases grew exponentially as the extent of the problem was uncovered.”

The people coming into the Kalispell law firm are sometimes pulling oxygen tanks, or grandchildren, in tow. The families may wait years for some kind of settlement, some kind of closure.

“It’s like losing a really good friend” when they die, McGarvey said. “And it’s sad when someone dies before their recovery of damages.”

McGarvey seems as passionate today about the victims – and the corporate greed that led to their illnesses – as when he and his partners took over the law firm from his father a few years ago. Longtime Montana attorney Dale McGarvey helped initiate the original asbestos litigation against W.R. Grace. One of Dale McGarvey’s partners, Jon Heberling, has been the lead attorney on the asbestos cases since their inception.

What They Knew

Allan McGarvey shows a presentation that outlines just how much the corporate entities knew about the asbestos contamination in Libby, from the Montana health officials who oversaw inspections at the facilities to the corporate executives who were selling the packaged vermiculite insulation to stores around the nation.

He shows a Libby lumbermill newspaper ad that touted the safety of the vermiculite for home insulation. Meanwhile, internal memos the law firm unearthed through the discovery process showed that the company knew exactly what it was dealing with.

One memo from W.R. Grace’s insurance company that McGarvey pulls up on his computer reads: “These employees, as far as we know, are not presently disabled. If we minimize their exposure, chances are we may be able to keep them on the job until they retire, thus precluding the high cost of total disability.”

Another memo that McGarvey showed said the company’s strategy was to “be slow, obstruct, block” any public knowledge or opposition to the presence of asbestos in the vermiculite mining process in Libby.

McGarvey said the corporate strategy was this: “Use a congressman, and hide it. Use scientists and hide it. Lie to your employees. Don’t let them go on disability.”

The lawyer said the W.R. Grace internal memos had discussed creating change rooms and showers so workers wouldn’t take the deadly asbestos dust home with them, “but it would have cost $450,000 and they never did it.”

A Deadly Path

The Rainy Creek drainage outside of Libby where the vermiculite is mined has a geologic vein of asbestos vermiculite. The vermiculite ore was mined, crushed and ground at W.R. Grace’s mill outside of Libby on Zonolite Mountain, where 12 tons of dust per day containing up to 40 percent asbestos – five tons of asbestos dust – was emitted from the mill into the air, McGarvey said. The raw material was then transported to a loading facility near the Kootenai River and taken on rail cars to Libby, where it spilled along the railroad tracks.

The workers got sick from the asbestos dust. And they brought the asbestos home with them, infecting their families.

A federal criminal case was brought against W.R. Grace, but that case was lost in 2009 and the company has been protected from further litigation by bankruptcy.

An insurance trust fund was set up in the bankruptcy, and any new cases against Grace now go against that fund – subject to limits and the settlements are “pennies on the dollar,” McGarvey said.

These deaths from asbestos disease will create another generation of litigation, McGarvey said.

“Every time someone dies there’s another flurry of activity,” he said. “There’s no end to it. They can go to an attorney, and they often come to us.”

The Kalispell firm has hired new attorneys like John Lacey, who have taken up the career of law “for the right reason,” McGarvey said.

The firm now carries the torch of his father Dale’s passion for civil litigation, along with partners Jon Heberling and Roger Sullivan – the original asbestos-disease litigants in Montana.

“The legacy of this firm continues to do that work, which I hope we can continue to do for many years,” McGarvey said. “We don’t defend these companies; we sue them, and you’ve got to have a heart for that work.”

Sullivan explained that there are other culpable parties. That’s why most of the cases now are against entities who were involved in some way with the Grace enterprise: Montana, which inspected the mine; Burlington Northern Santa Fe Railway, which shipped the concentrated vermiculite ore; and Maryland Casualty Insurance Company, which supposedly knew about the contamination.

In the early days of litigation against W.R. Grace before the bankruptcy, most cases were tried in Libby and often settled on the courthouse steps – or they went to a verdict, McGarvey said.

Back then community members tended to not sue the companies that gave them a paycheck.

“‘This company was good to our town,’ they’d say,” McGarvey said. “But as more information about the asbestos illnesses came out, those attitudes started to change.”

Victims don’t seek vindication or revenge on the companies that ran Libby for decades, McGarvey said, but it’s mostly a question of “‘How do we deal with this sickness that has fallen on our family?’”

Prior to the bankruptcy, judgments and settlements could reach in the area of $800,000. Then the bankruptcy hit in 2001, which was a “profoundly disappointing, traumatic event,” McGarvey said.

“The entire litigation against Grace stopped, but clients were still dying,” he added.

Fortunately for their clients, Sullivan explained, lawsuits have continued against other responsible parties.

Where the Money Goes

Recoveries vary, but they now might fetch up to $100,000 for the asbestos victim or their family, Sullivan said.

And before that money gets paid out, attorneys’ fees must be paid and the Medicare program has to step in.

If the victim in a settlement received Medicare, any health care costs associated with their illness must be paid first. And not the insurance premium cost – the total cost of the care. It can take months to settle with Medicare, McGarvey said. Meanwhile, his office’s phones keep ringing with asbestos victims asking when they’ll get their money.

“What do I tell that client?” McGarvey said. “I’ve pushed it as hard as we can, but we have to try to keep a working relationship with the bureaucracies so they don’t stop answering our phone calls.”

Meanwhile, the law firm is gearing up to resolve hundreds of its clients’ claims in the Grace bankruptcy, according to Sullivan.

McGarvey said he may have to take some of the cases to trial to prove settlements are worth more than cents on the dollar.

“We recover only a pittance compared to what we got before the bankruptcy,” he said.

Although the Jan. 18 settlement with Montana does not include an admission of liability, some will contend that it shows the state was liable for not informing the public about the dangers of the vermiculite mine in Libby, Sullivan said.

Reports from state inspectors while the mine was in operation show the vermiculite was “highly toxic and deadly,” McGarvey said, “but the reports were stamped confidential and no one else saw them.”

McGarvey claims the state had a duty to protect not only the workers at the mine from known dangers, but also the public. His firm’s initial suit against the state lost at the trial court level, but won at the Montana Supreme Court.

The state’s high court ruled the state has a duty to workers and families, as determined in Orr v. the State of Montana, but did not address whether the state has a duty to protect the “broader, endangered” public, McGarvey said.

“It would be awful to apply the public-duty doctrine to relieve the state of its obligation to protect a community that the state knew was being harmed,” McGarvey said. “There’s no discretion in the state’s duty to protect the public and advise of risk. They have a statutory duty to protect the public.”

While Montana will have to front the money in last week’s settlement, depending on the outcome of a pending lawsuit its insurance company National Indemnity might have to pay 80 percent of the settlement as some claims are not covered by the insurance company, Sullivan explained.

Almost all of the cases against the W.R Grace bankruptcy trust now have a claim against Montana over a failure to inform. In another proceeding, attorneys also won a right to proceed against Maryland Casualty, which had insured W.R. Grace and hid the fact that there was dangerous asbestos in the insulation products, McGarvey said.

Asbestos cases now make up about 80 percent of the firm’s case load, McGarvey said. And as the original litigants begin to die off, the cases will shift their focus to wrongful death – when a descendant loses an ancestor to asbestos disease – they may have standing to sue the remaining companies that processed or shipped the vermiculite insulation.

Financing the Litigation

McGarvey said it’s often risky in these type of contingency cases, not knowing when an attorney’s next paycheck is coming in. And he’s concerned that relaxing the nation’s business rules to “make America great again” – President Donald Trump’s mantra – could lead to relapses of situations like the one in Libby, where hundreds of people have died from asbestos and corporate greed.

“I’ve always known there were bad actors and greedy people out there,” he said. “But I always felt there were two sides to any story. But I am shocked at the things I see. Corporate culture is to screw the people and make money. I never knew it was this bad. Taking away rules and freeing up businesses to do their jobs without oversight only enables more bad actors.”

He added, “Good companies with good people get beat in the market by bad companies, because the bad companies are cheating and causing harm while the good companies are playing by the rules.”

It can take 10 to 20 years for symptoms of asbestos disease to develop — for the asbestos fibers to migrate deeper into the lungs and eventually begin to suffocate the victim. Those victims will see a physician, whose first question is often, “Did you live in Libby?” McGarvey said.